Appraisal myths & facts

It is mandated by the government that an appraiser is required to be state-licensed to offer appraisal reports for federally-related property sales in Louisiana. The law gives you the right to acquire a copy of your finished appraisal from your lending agency after it has been provided. Contact us if you have any concerns about the appraisal process.

Myth: Market value needs to be the same as the assessed value of the property.

Fact: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always. Examples include when interior remodeling has happened and the assessor does not know about the improvements, or when homes in the area have not been reassessed for an extended period of time.

Myth: Depending on whether the appraisal is ordered for the buyer or the seller, the opinion of value of the home will vary.

Fact: The appraiser has no personal interest in the result of the appraisal and should complete his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.

Myth: Any time market value is found, it should be similar to the replacement cost of the home.

Fact: Without any influence from any different parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific property. Replacement value is the dollar amount needed to rebuild a property in-kind.

Myth: Specific methods, such as the price per square foot of the property, are what appraisers use to arrive at the worth of a house.

Fact: There are many different formulae that an appraiser will use to make an in-depth analysis of every factor pertaining to the house, such as the size, location, condition, how close it is to certain facilities and the value of recently sold comparable homes.

Myth: As houses appreciate by a specific percentage - in a robust economic state - the properties nearby are expected to appreciate by the same amount.

Fact: Any price at which an appraiser arrives in regards to a certain property is always individualized, based on certain factors found from the data of comparable houses and other considerations within the property itself. This is true in fair economic times as well as poor.

Myth: The home's outside is determinate of the actual value of the home; there is no need to do an interior appraisal.

Fact: To conclude an accurate value beyond all doubt, an appraiser must examine the property on a variety of factors based on area, condition, improvements, amenities, and current market trends. As you can see, none of these factors can be derived just by inspecting the house from the exterior.

Myth: Because consumers fund appraisals when applying for loans to buy or refinance their home, they own their appraisal report.

Fact: Unless a lending agency releases its interest in the report, it is legally owned by the lending agency that ordered the appraisal. However, home buyers must be provided with a copy of the document upon written request, due to the Equal Credit Opportunity Act.

Myth: Consumers need not care about what is in their appraisal document so long as it meets the requirements of their lending group.

Fact: Only if consumers read a copy of their report can they double-check its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can double as a record for the future, since it contains an exorbitant amount of data - including, but certainly not limited to the legal and physical description of the property, square footage measurements, list of comparable properties in the neighborhood, neighborhood description and a narrative of current real-estate activity and/or market trends in the proximity.